DON Architecture: Decentralized Oracle Network in Axis Chain

The Decentralized Oracle Network (DON) is one of the most critical components within Axis Chain’s Active Validated Services (AVS). It plays a central role in enabling secure, decentralized, and efficient data transmission between off-chain sources and Axis Chain, ensuring smooth cross-chain interactions and data integrity. In Axis Chain, DONs are responsible for fetching, verifying, and transmitting essential off-chain data, as well as executing key computations, all while maintaining the security of the system.

1. Composition and Role of DONs

Each DON in Axis Chain consists of a minimum of three nodes, ensuring a secure and decentralized structure even at the most basic level. These nodes collaborate to retrieve off-chain data, validate it, and deliver it to the chain in a trustworthy manner. The three-node minimum ensures redundancy and decentralization, mitigating the risk of a single point of failure and enhancing the integrity of the data being processed.

The DON’s tasks range from fetching price feeds, performing off-chain computations, to more complex functions like managing cross-chain liquidity mirroring. This architecture ensures that Axis Chain remains scalable and secure, even as the network grows.

2. Number of DONs and Bundling with Validators

The number of DONs required is flexible, scaling based on the system’s needs. For larger or more complex tasks, multiple DONs can be bundled together, ensuring that high-volume transactions or critical operations have the necessary computational and security resources.

DONs are closely integrated with Axis Chain’s Proof of Liquidity (PoL) consensus mechanism. In this setup, validators—who stake liquidity rather than traditional tokens—depend on DONs for accurate off-chain data to maintain network security. DONs supply the real-time data needed by validators to confirm cross-chain transactions and validate blocks, ensuring that the information processed by validators is secure and accurate.

3. Cross-Chain Liquidity Mirroring

One of the key functions of DON in Axis Chain is enabling cross-chain liquidity mirroring, a process where assets staked or held on external chains (such as Ethereum) or centralized exchanges (like Coinbase or Binance) are mirrored securely onto Axis Chain. This allows users to interact with their assets across multiple ecosystems while maintaining the integrity and security of their original holdings.

Here’s how the cross-chain liquidity mirroring process works:

• Data Retrieval and Verification: DON nodes retrieve data from external chains or centralized exchanges, ensuring that the state of staked assets (such as ETH or collateral on an exchange) is accurately verified.

• Mirroring on Axis Chain: After the data is verified, the DON mirrors the assets on Axis Chain, creating a liquid representation (such as LSTs) that users can interact with in DeFi protocols on Axis Chain while still maintaining their staked assets elsewhere.

• Security via PoL: Once mirrored, these assets are secured using Axis Chain’s PoL mechanism, where liquidity providers and validators secure the network while keeping their liquidity functional.

This allows users to benefit from liquidity and DeFi activities on Axis Chain while maintaining their original stakes on other networks, providing a powerful, capital-efficient system that ensures cross-chain compatibility.

4. DON Integration in Cross-Chain Collateral

For example, a user may stake ETH on Ethereum while simultaneously receiving mirrored Liquid Staking Tokens (LST-ETH) on Axis Chain. These tokens, issued through DON, can be used in DeFi applications while the staked ETH continues to accrue rewards on Ethereum.

Similarly, a user might deposit collateral on a centralized exchange like Binance. Axis Chain’s DON will mirror this collateral, issuing corresponding LSTs on Axis Chain, allowing the user to engage in DeFi operations without having to withdraw or manually transfer assets from the exchange.

5. Role of DON in AVS

As a core component of Axis Chain’s Active Validated Services (AVS), the DON is responsible for ensuring that off-chain data and cross-chain assets are securely integrated into the Axis Chain ecosystem. The minimum of three nodes per DON provides a robust foundation for data integrity and security, ensuring that the data supplied by the DON remains trustworthy even in the face of potential attacks or failures. For more complex or higher-value transactions, additional nodes can be added to a DON, increasing the security and reliability of the data being processed.

This architecture ensures that Axis Chain remains resilient and scalable while allowing for advanced functionalities like cross-chain liquidity mirroring and decentralized computation.

6. Advantages of Using DON in Axis Chain

The DON architecture provides several key advantages:

• Security and Redundancy: With a minimum of three nodes per DON, the system maintains decentralization and redundancy, safeguarding against data manipulation or node failure.

• Cross-Chain Interoperability: DON allows assets from multiple ecosystems to be seamlessly mirrored onto Axis Chain, enabling users to maintain liquidity and earn rewards across different platforms.

• Capital Efficiency: By leveraging cross-chain mirroring and Liquid Staking Tokens, DON ensures that users can maximize the use of their assets without the need to unstake or move them manually.

• Decentralization: The DON structure is inherently decentralized, providing transparent and trustless access to external data for Axis Chain’s validators and DeFi protocols.